BUSN 380 DEVRY WEEK 3 PROBLEM SET 3
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on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on<br />
the full amount borrowed even though a portion of the principal has been paid back. Richard borrows<br />
$8,000 for a period of four years at an add-on interest rate of 11 percent.<br />
Questions<br />
a. What is the total interest on Richard’s loan?<br />
b. What is the total cost of the car?<br />
c. What is the monthly payment?<br />
d. What is the annual percentage rate (APR)?
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